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Supreme Court of Pennsylvania. 



Natural gas belongs to the owner of the land, and is a part of it, and, so long as 
it is on or in it, is subject to his control ; but when it escapes, and goes into other 
land, or comes under another's control, the title of the former owner is gone. 

If an adjoining or distant owner drills a well on his own land, and taps his 
neighbor's vein of gas, so that it comes into his well and under his control, such 
gas belongs to the owner of the well. 

The owner of land, leasing it to another for the purpose of drilling gas wells 
thereon, and reserving the right to till the soil, after the lessee has drilled a well 
and has gas ready to flow into pipes byturning a valve, cannot claim that the lessee 
is not in possession, and that he must resort to a court of law to establish his title 
before a court of equity will interfere. 

The grant by lease of a certain tract of land for the purpose of sinking and op- 
erating gas wells, " no wells to be drilled within 300 yards of the brick building " 
on the tract, is a release of the right of the grantor to lease the land within such 
300 yards, for the purpose of sinking and maintaining a gas well. 

If both parties disregard the strict terms of a lease, respecting payment at the 
lessor's request, and no attention is paid to a delay in part of a payment, and no 
demand is made therefor by the lessor, such acts constitute a waiver of the right to 
demand a forfeiture for non-payment. 

A payee, by saying that it will be useless to exhibit the money to him, when the 
money is present, waives his right thereafter to insist that no proper tender in that 
respect was made. 

Appeal from Court of Common Pleas of Westmoreland 

Moorhead & Head, for appellant. 

D. S. Atkinson, J. M. Peoples, Vin. E. Williams, and W. A. 
Griffith, for appellees. 

Mitchell, J., November n, 1889. Complainants filed a 
bill, setting forth a lease of land from Brown, one of the respon- 
dents, for oil and gas purposes ; the expenditure of large sums 
of money under the lease ; a subsequent lease of the same land 
by Brown to the other respondents, who took with knowledge 
of complainants' rights ; and the entry by them with the intent 
to drill a well upon the said land, and take gas, etc. The bill 
concluded with an averment that such a well could be drilled 


and put in operation in about forty days, long before an adju- 
dication could be had upon the rights of the parties, and that 
thereby enormous waste would be committed upon the prem- 
ises of complainants, and irreparable injury to their interests; 
wherefore they prayed an injunction, etc. The answer of re- 
spondents substantially admitted all of the facts set up in the 
bill, except that the well which they were about to drill was on 
premises leased to complainants, and that irreparable injury to 
complainants would result therefrom; and further setting up 
that the lease to complainants had been forfeited for non-pay- 
ment of certain moneys due thereunder. 

Two issues, therefore, were raised by the pleadings : First, 
whether the well contemplated by the respondents was upon 
the leased land ; and, secondly, whether there had been a for- 
feiture of the lease. The actual fact not being disputed, both 
these issues really turned on the construction of the lease. 
Under these issues the parties went on for some months, and 
completed their evidence. When, however, the case came to 
be argued before the master, the respondents took the ground 
that the complainants, being out of possession, and their title 
being disputed, had no standing in equity, but must first estab- 
lish their rights at law. The learned master adopted this view, 
found as a fact that complainants were out of possession, and 
reported, as a conclusion of law therefrom, that the bill must 
be dismissed. The Court below adopted this report with only 
a formal opinion, expressing unwillingness to say the master 
had erred. 

The master finds formally that, " during several months prior 
to the filing of the bill, Brown, claiming a forfeiture of said 
lease, had taken full and absolute possession of the premises 
and rights mentioned and granted in the lease." An examin- 
ation, however, of the evidence fails to disclose a single fact on 
which such a finding can be sustained. It rests entirely on a 
misconception of the subject-matter of the possession in ques- 
tion, and the nature of the possession itself of which the sub- 
ject-matter admitted. The subject of possession was not the 
land, certainly not the surface. All of that, except the portions 
actually necessary for operating purposes, was expressly re- 
served by the lease to Brown, the lessor. Except of such por- 


tions, the complainants had no possession that was not con- 
current with that of the lessor, if, indeed, it could be called 
possession of the land at all. Complainants' right in the sur- 
face of the land under the lease was rather in the nature of an 
easement of entry and examination, with a right of possession 
arising where a particular place of operation should be selected, 
and the easement of ingress, egress, storage, transportation, 
etc., during the continuance of the operation. The real subject 
of possession to which complainant was entitled under the 
lease, was the gas or oil contained in, or obtainable through, 
the land. 

The learned master says, gas is a mineral, and while in situ, 
is part of the land, and therefore possession of the land is pos- 
session of the gas. But this deduction must be made with 
some qualifications. Gas, it is true, is a mineral ; but it is a 
mineral with peculiar attributes, which require the application 
of precedents arising out of ordinary mineral rights, with much 
more careful consideration of the principles involved than of 
the mere decisions. Water also is a mineral ; but the decisions 
in ordinary cases of mining rights, etc., have never been held 
as unqualified precedents in regard to flowing, or even to per- 
colating, waters. 

Water and oil, and still more strongly gas, may be classed 
by themselves, if the analogy be not too fanciful, as minerals 
ferce natures. In common with animals, and unlike other min- 
erals, they have the power and the tendency to escape without 
the volition of the owner. Their " fugitive and wandering ex- 
istence within the limits of a particular tract was uncertain," as 
said by Chief Justice Agnew in Brown v \Vande grift (1875), 80 
Pa. 147, 148. They belong to the owner of the land, and are 
part of it, so long as they are on or in it, and are subject to his 
control ; but when they escape, and go into other land, or 
come under another's control, the title of the former owner is 
gone. Possession of the land, therefore, is not necessarily 
possession of the gas. If an adjoining, or even a distant, 
owner, drills his own land, and taps your gas, so that it comes 
into his well and under his control, it is no longer yours, but 
his. And equally so as between lessor and lessee in the present 
case, the one who controls the gas — has it in his grasp, so to 


speak — is the one who has possession in the legal as well as 
in the ordinary sense of the word. 

Tested by these principles, there is not the slightest doubt 
that the possession of the gas, as well as the right to it under 
this lease, was in the complainants when the bill was filed. 
They had put down a well, which had tapped the gas-bearing 
strata, and it was the only one on the land. They had it in 
their control, for they had only to turn a valve, to have it flow 
into their pipe, ready for use. The fact that they did not keep 
it flowing, but held it generally in reserve, did not affect their 
possession any more than a mill-owner affects the continuance 
of his water-right when he shuts his sluice-gates. On the 
other hand, Brown had no possession of the gas at all. His 
possession of the soil for purposes of tillage, etc., gave him no 
actual possession of the gas ; and he had no legal possession, 
for his lease had conveyed that to another. How, then, had 
he taken " full and absolute possession of the premises and 
rights," as found by the master ? Apparently, he had asserted 
to the complainants his claim that the lease was forfeited. In 
addition, on one occasion, when the agent of complainants was 
at their well for a specific purpose, Brown had ordered him off 
the land ; but there is no evidence that he went until he had 
finished his business there. Shortly before this the complain- 
ants had sent men on the land to begin the erection of a derrick 
for a second well, and Brown had ordered them off. This, 
which is the strongest item in the proof, is really no evidence 
at all of dispossession of complainants. They still remain in 
possession of their well, which gave them the sole control of 
the gas, so far as its utilization was concerned, and the sole 
possession of which it was capable, apart from the land, from 
which it had been legally severed by the lease. The utmost 
that can be said of such an occurrence is that it was a violent 
and temporary interference with that portion of complainants' 
rights which authorized them to put down a second well. 
This was no more a dispossession of complainants from their 
occupation of the gas than blocking up one of a farmer's roads 
to his home would be an ouster from his farm. We are there- 
fore of opinion that the master was wrong in finding as a fact 


that complainants were out of possession, and should be re- 
mitted to an ejectment to establish their title at law. 

As to the other objections to the jurisdiction of equity, they 
require but a brief notice. The bill is a bill to stay waste, and 
that the damage threatened, even if not irreparable, is entirely 
incapable of measurement at law, cannot be seriously ques- 
tioned. Such cases were among the earliest, and have always 
been among the most incontestable, within the chancellor's 
jurisdiction. It is superfluous to cite authorities for so familiar 
a principle, but I may refer to Allison 's Appeal (1875), yj Pa. 
221, as a recent case in this Court, where the invasion restrained, 
was of complainants' right to oil, a fluid far more capable of 
accurate measurement than gas. 

The learned master having come to the conclusion that the 
bill should be dismissed for want of equity, forbore to consider 
and pass upon the substantial issues raised by the pleadings. 
But as the evidence was fully taken by both parties before him, 
and he has found all the facts necessary to a final determina- 
tion of the whole controversy, we will proceed to consider it. 
The actual facts, as already said, are not disputed, and both 
issues substantially depend upon the construction of the lease. 

We have therefore to consider — First, whether the well 
threatened to be put down by respondents was upon the leased 
land. Of this there cannot be the slightest doubt. The lease 
is of "all that certain tract of land," etc. This means the whole 
tract. The grant is limited as to the intention " for the sole 
and only purpose of drilling and operating wells," etc., but is 
not limited as to territory. Following the description of the 
tract is the clause on which respondents rely — 

" No wells to be drilled within three hundred yards of the brick building belong- 
ing to J. H. Brown." 

The well which respondents propose to bore is within this 
prohibited distance; and the respondents claim that Brown, 
and they as his lessees, have the right to drill wells within 
that part of the territory. But the clause in question is 
neither a reservation nor an exception as to the land, but a 
limitation as to the privilege granted. It does not, in any 
way, diminish the area of the land leased, — that is still the 
whole tract ; but it restricts the operations of the lessees in 
Vol. XXXVIII.— 7 


putting down wells to the portions outside of the prohib- 
ited distance. For right of way and other purposes of the 
lease, excepting the location of wells, the space inside the 
stipulated line is as much leased to the lessee as any other 
part of the tract. The terms of the grant would imply the 
reservation to the lessor of the possession of the soil for 
purposes other than those granted to the lessee, and the par- 
ties have expressed what otherwise would have been implied 
by the provision that the lessor is to fully use and enjoy the 
said premises for the purpose of tillage, except such part as 
shall be necessary for said operating purposes. 

From the nature of gas and gas operations, already dis- 
cussed, the grant of well-rights is necessarily exclusive. It 
was so held even as to oil-wells, in Funk v. Haldeman ( 1 867), 
53 Pa. 229, 247, 248, although, in that case, the plaintiff had a 
mere license to enter, etc., and not, as complainants here, a 
lease of the land ; and it is exclusive, in the present case, over 
the whole tract. As already said, the clause relative to the 
300-yards distance was a restriction on the privilege granted, 
not a reservation of any land, or any boring rights, to the 
lessor; and a well upon the prohibited portion was just as 
damaging to the lessees as upon any other portion of the tract. 
The drilling of the well threatened by respondents, is there- 
fore in violation of the lease, and should be enjoined if the 
lease is still in force. 

Secondly, has there been a forfeiture of the lease ? It is 
claimed by respondents on account of the failure of the lessee 
to make certain stipulated payments. The lease is dated 
December 7, 1885, and by its terms the lessee was to pay $500 
a year for each gas-well, payable quarterly, in advance, from 
the completion of each and every well ; and in case one well 
should not be completed within three months from the date of 
the lease, then to pay 

" For such delay the sum of one hundred and twenty-five dollars every three 
months from the date of this agreement ; * * * and [lessor] agrees to accept 
such sum as full consideration and payment for such delay until one well shall be 
completed; and a failure to complete one well, or to make any of such payments 
within such time and at such place as above mentioned, renders this lease null 
and void. * * * It is further agreed that if any of the within payments remain 
unpaid thirty days, then this lease to be null and void." 


These are all the provisions which bear upon the present 
question, and their effect is entirely clear. One well is to be 
completed in three months, and the rent is to begin from its 
completion. This is the primary intent and expectation of 
the parties. But, if not so completed, then the lessee is to 
pay a like amount from the date of the agreement, until one 
well is completed, and thereafter, of course, the payments are 
not to be for delay at the end of each three months, but 
as rent, quarterly, in advance. A failure to pay any of the 
sums due for a period of 30 days, is to render the lease null 
and void. The first provision for forfeiture cannot be read 
literally and separately, as it is in manifest conflict with the 
other covenants. Thus it invokes a forfeiture for failure to 
complete one well in three months, but in so doing it is repug- 
nant to the agreement to accept the stipulated " full considera- 
tion and the payment for delay." Again, it imposes the for- 
feiture for failure to make any of the payments at the time and 
place mentioned, and in so doing is in conflict with the sub- 
sequent agreement that the forfeiture shall only be for a default 
of 30 days. Reading all these clauses together, therefore, as 
we are bound to do, the last-mentioned clause, calling for a 
forfeiture upon a default of 30 days in the payments, is the 
only one that is effective for the purpose of forfeiture. 

Before passing to the acts of the parties, it may be well to 
notice very briefly the construction of the agreement set up 
by the respondents in their answer, though not pressed in their 
argument. It is that the default in payment ipso facto created 
a forfeiture ; or, in other words, that the forfeiture was absolute 
and self-operating, without regard to the acts or wishes 
of the parties. Such a construction is utterly untenable. It is 
contrary, not only to the settled rules of law, but to the mani- 
fest intentions of the parties. This question is definitively 
settled in Wills v. Gas Co. (at the present term, Nov. 1 1, 1889), 
the opinion in which is filed herewith by our Brother Clark. 

Coming now to the facts as reported by the master and 
practically undisputed, we find that the parties from the out- 
set, entirely disregarded the strict times and terms of pay- 
ment, as set out in the lease. On the day following the date 
of the lease, the lessees paid $250 on account. It is admitted 


that such payment was made, and that it was a voluntary ad- 
vance, as nothing was or would be due under the lease for 
three months, and then only half that amount. In June, an- 
other payment of $250 was made, and this, again, was more 
than was due under any possible construction of the lease. A 
quarterly payment for delay had become due on March 7, 
1886. The well being completed April 23, there would, under 
the construction contended for by the lessor, then be due com- 
pensation for the 46 days of additional delay, amounting to 
$65, and a quarter's rent in advance, which latter was covered 
by the advance of $250 in the previous December. The June 
payment, therefore, fully covered this $65, another quarter's 
rent from July 23 to October 23, and an advance of $60 — 
nearly one-half the quarter's rent that would become due in 
October, four months later. This calculation, as already said, 
is upon the most favorable possible construction for the les- 
sor. But in fact there is not the slightest doubt that both 
parties entirely disregarded the strict terms of the lease as to 
times of payment, and treated the payments of December and 
June as semi-annual advances of the stipulated sum, no matter 
whether called " compensation for delay " or " rent," as the 
amounts in either case were exactly the same. Neither party 
paid the least attention to the possible fag end of a quarter's 
delay, the lessor never demanded it, no reference to it was 
made at the time of the June payment, and it made its appear- 
ance in the transactions months later as an after-thought. 

Forfeitures, if no longer odious — and I for one am too 
strongly in favor of the enforcement of contracts as parties 
make them, to apply harsh names to strict constructions — are 
yet not favored, either at law or equity, and among the least 
favored have always been those founded on mere delay in the 
payment of money. In this case, there is not the slightest 
pretense of any other ground for forfeiture, than the failure to 
pay a small amount of money in advance. As already shown, 
not a single payment under this lease was made strictly ac- 
cording to its terms ; the departure was begun by the lessor's 
request, and was always in his favor. To allow him now to 
turn around without notice and enforce a forfeiture for a fail- 


ure of the insignificant proportions shown, would be sanction- 
ing a fraud such as no court has ever permitted. 

There is another ground equally fatal. Forfeitures are 
always strictly construed; and, looking at the facts, none has 
been incurred here, even on respondent's own view of the 
amounts due. As already seen, the June payment, deducting 
the $65 for delay, still paid the quarter's rent beginning July 
23, and nearly half of the quarter beginning October 23, 
1886. Under the lease, a forfeiture would not be incurred un- 
less a payment should remain unpaid for 30 days. On October 
23, a quarter's rent was due in advance, but only half of it was 
unpaid, for half of it had been paid in advance in the preceding 
June. The lease does not provide a forfeiture for failure 
to pay a balance, but only " if any of the within payments 
remain unpaid," which means a whole payment, not a balance 
on a running account. No forfeiture, therefore, was incurred, 
or could be, until the next payment should become due and 
be unpaid for 30 days. The next quarter day was January 23, 
1887; and a week before that date, on January 15, the les- 
sees tendered the rent to Brown, and it was refused. The 
master's findings of fact, under the view he took, do not ex- 
tend to the occurrences of January 15, 1887; but the testi- 
mony was taken by both parties, and leaves no doubt that 
there was a valid tender. Both Rhodes and Webb say the 
money was held in one hand, where Brown could see it, while 
the voucher was read to him ; and Brown himself says 
Rhodes told him he had come to pay, though he did not ac- 
tually see the money, and that he told Rhodes it would " be 
altogether unnecessary " to show the money. This, under the 
circumstances, dispensed with further formalities. Whether, 
therefore, we regard the strict conditions of the lease as waived 
by the conduct of the parties, or the failure in payment as 
only a partial and incomplete default, it is equally clear that 
there was no forfeiture, and the respondents have failed to 
show any defense to the bill. 

The decree is reversed, the bill reinstated, and the injunc- 
tion reinstated, made perpetual, and directed to be so issued ; 
costs to be paid by the appellees ; and the record is remitted 
to the Court below to execute this order. 



Note. — The analogy between natu- 
ral gas and petroleum is so striking that 
we propose to cite cases respecting both 
of them. 

An "Internal Improvement ' ' — 
Right of Eminent Domain. An Act of 
West Virginia (Act of February 27, 
1867; Laws of 1867, Ch. 95, p. no; 
amended February 26, 1868; Laws of 
1868, Ch. 67, p. 63) created a cor- 
poration " to lay out and construct or 
cause to be laid out and constructed and 
maintained a line or lines of tubing, for 
the purpose of transporting petroleum 
or other oils through pipes of iron or 
other materials," in certain counties, 
" to any railroad or other roads, or to 
any navigable stream or streams in or 
adjoining" the counties named, "and 
to transport from the termini of said 
pipe or pipes, petroleum or other oils 
in tank cars, boats or other receptacles 
belonging to said company." The Act 
established the maximum charges the 
company could make for transportation. 
This was a special Act ; and the Con- 
stitution (of 1 863) provided that " The 
Legislature shall pass general laws 
whereby any number of persons, asso- 
ciating for mining, manufacturing, in- 
suring, or other purpose, useful to the 
public, excepting banks of circulation, 
and the construction of works of in- 
ternal improvement, may become a cor- 
poration," etc. 

The Court held that this company 
was engaged in a work of " internal 
improvement," and its charter author- 
ized by the Constitution : West Vir- 
ginia Transportation Co. v. Volcanic 
Oil and Coal Co. (1872), 5 W. Va. 

The transportation and supply of 
natural gas for public consumption is 
recognized as a public use in Pennsyl- 
vania; and the right of eminent do- 
main granted to such corporations by the 
Act of 1885, is within the constitutional 
power of the Legislature to grant. " It 

is a curious objection to set up against 
the Act of 1885, in view of the present 
consumption of natural gas, that its use 
is not a public one, and that, therefore, 
those corporations which are engaged 
in its transportation, may not be vested 
with the right of eminent domain. As 
well might this objection be urged 
against the vesting of this power in 
those companies which have been incor- 
porated for the purpose of supplying 
our towns and villages with water, in 
which the public interest is found not 
in the transportation, but in the use of 
that fluid, after it has, by these agencies, 
been transported. Nor would it seem 
to us as of the slightest materiality that 
the water thus produced, had been 
drawn from a simple spring, well or 
basin. Just so with natural gas ; it has 
become a public necessity, but as it 
cannot be used except it be piped to 
the manufactories and residences of the 
people, it follows that as the piping of 
it is necessary to its use, the means so 
used for its transportation must be of 
prime importance to the public, and 
directly affect its welfare:" Per Cu- 
riam, Johnston v. People's Natural Gas 
Co. (Sup. Ct. Pa., Nov. 15, 1886). To 
the same effect, Bloomfield &> Rochester 
Natural Gas-Light Co. v. Richardson 
(1872), 63 Barb. (N. Y.) 437; Appeal 
of Pittsburgh (1886), 115 Pa. 4; Ca- 
rothersv. Philadelphia Co. (1888), 118 
Id. 468. 

[The Pennsylvania Act of 1885 (P. 
L- pp- 33-35) provides — " Section 10. 
The transportation and supply of natu- 
ral gas for public consumption, is hereby 
declared to be a public use, and it shall 
be the duty of corporations, organized 
or provided for under this Act, to fur- 
nish to consumers along their lines and 
within their respective districts, natural 
gas for heat, or light, or other purposes, 
as the corporation may determine. Any 
and all corporations that is, or are now, 
or shall hereafter be engaged in such 



business, shall have the right of emi- 
nent domain for the laying of pipe lines 
for the transportation and distribution 
of natural gas; the right, however, shall 
not be exercised as to any burying 
ground or dwelling, passenger railroad 
station-house, or any shop or manu- 
factory in which steam or fire is neces- 
sarily used for manufacturing or repair- 
ing purposes, but shall include the right 
to appropriate land upon or under which 
to lay said lines and locate pipes upon 
or over, under and across, any lands, 
rivers, streams, bridges, roads, streets, 
lanes, alleys, or other public highways, 
or other pipe lines, or to cross railroads 
or canals : Provided, In case the pipe 
lines cross any railroad, operated by 
steam, or canal, the same shall be located 
under such railroad or canal, and in 
such manner as the railroad or canal 
company may reasonably direct. And 
provided further, That any company 
laying a pipe line under the provisions 
hereof, shall be liable for all damages 
occasioned by reason of the negligence 
of such gas company : And provided 
further, That no company authorized 
by this Act, shall have the right to oc- 
cupy longitudinally, the right of way, 
road bed, or bridge of any railroad 
company: And provided, If any pipe 
line laid under the provisions of this 
Act, or laid upon or over lands cleared 
and used for agricultural purposes, the 
same shall be buried at least twenty- 
four inches below the surface, and if 
any line of pipe shall be laid over or 
through any waste or woodland, which 
shall be changed to farming land, then 
it shall be the duty of the corporation 
to immediately bury the said pipe to the 
depth of at least twenty-four inches as 

Prior to any appropriation, the cor- 
poration shall attempt to agree with the 
owner as to the damage properly pay- 
able for an easement in his or her pro- 
perty, if such owner can be found and 

is sui juris, failing to agree, the corpo- 
ration shall tender to the property owner 
a bond with sufficient sureties to secure 
him or her in the payment of damages ; 
if the owner refuse to accept said bond 
or cannot be found or is not sui juris, 
the same shall then be presented to the 
Court of Common Pleas of the proper 
county, after reasonable notice to the 
property owner, by advertisement or 
otherwise to be approved by it. Upon 
the approval of the bond, and its being 
filed, the right of the corporation to 
enter upon the enjoyment of its ease- 
ment shall be complete. Upon petition 
of either the property owner or the corpo- 
ration, thereafter, the Court of Common 
Pleas shall appoint five disinterested 
freeholders of the county to serve as 
viewers to assess the damages proper to 
be paid to the property owner, for the 
easement appropriated by the company, 
and shall fix a time for their meeting of 
which notice shall be given to both 

Either party may appeal from the 
report of the viewers, within twenty 
days after the filing thereof, to the Court 
of Common Pleas, and have a jury trial 
as in ordinary cases, and writ of error 
to the Supreme Court. 

Section ii. The right to enter upon 
any public lane, street, alley, or high- 
way, for the purpose of laying down 
pipes, altering, inspecting, and repair- 
ing the same, shall be exercised in such 
way as to do as little damage as possi- 
ble to such highway, and to impair as 
little as possible the free use thereof, 
subject to such regulations as the coun- 
cils of any city may by ordinance adopt. 

Section 12. In all cases where any 
dispute shall arise between such cor- 
porations and the authorities of any 
borough, city, township or county, 
through, over or upon whose highways, 
or between it and any land owner or 
corporation, through,over or upon whose 
property or easement, pipes are to be 



laid, as to the manner of laying the 
pipes, and the character thereof, with 
respect to safety and public convenience, 
it shall be the duty of the Court of 
Common Pleas of the proper county, 
upon the petition of either party to the 
dispute, upon a hearing to be had, to 
define by its decree, what precautions, 
if any, shall be taken in the laying of 
pipes, and, by injunction, to restrain 
their being laid in any other way than 
as decreed. It shall be the duty of the 
court to have the hearing and make its 
decree with all convenient speed and 
promptness. Either party shall have a 
right to appeal therefrom, as in cases of 
equity, to the Supreme Court, but the 
appeal shall not be a supersedeas of the 
decree, and proceedings shall be had in 
like manner upon like petition, when 
and as often as any dispute arises as to 
pipes already laid, to define the duty of 
such corporation as to their re-laying, 
repair, amendment, or improvement. 

Section 13. Companies incorporated 
under this Act, and not referred to or 
included in the next succeeding section 
hereof, shall not enter upon or lay down 
their pipes or conduits on any street or 
highway of any borough or city of this 
Commonwealth, without the assent of 
the councils of such borough or city by 
ordinance, duly passed and approved." 

[Section fourteen provides for the 
acceptance of the provisions of this Act 
by corporations theretofore incorporated, 
under certain restrictions contained in 
this and the two following sections. 

[Sections one to eleven provide for 
incorporation of natural gas companies, 
and section seventeen for the consolida- 
tion of existing corporations. Sections 
eighteen to the end relate to injuries to 
•works, and to plugging wells. 

A statute of Pennsylvania (Act of 
April 24, 1874, P. L. 70 \ 4) provided 
" that every railroad company, coal 
company, steamboat company, slack- 
water navigation company, transporta- 

tion company, street passenger com- 
pany," etc., operating " any railroad, 
canal, slackwater navigation, or street 
passenger railway, or device for the 
transportation of freight or passengers," 
should be subject to pay into the State 
Treasury a certain tax. Under this law, 
a petroleum company, conveying oil 
from wells to tanks and reservoirs by 
means of pipes, were liable to the 
tax, as a " transportation company," 
transporting freight : Columbia Conduit 
Co. v. Commonwealth (1879), 90 Pa. 
307; Appeal of the City of Pittsburgh 
(1888), 123 Id. 374. 

An Act, passed long before natural 
gas was in use (Act of April 7, 1870, 
P. L. 1026, § 2), authorized the forma- 
tion of a company to buy, maintain, or 
manage in its own name, " any work or 
works, public or private, which may 
tend or be designed to improve, indorse, 
facilitate, or develop, trade, travel, or 
the transportation and conveyance of 
freight, live stock, passengers, or any 
other traffic, by land or water, from or 
to any part of the United States." It 
was held that this authorized the for- 
mation of a company to transport natu- 
ral gas; and the powers of eminent 
domain given by the statute (f! 4), em- 
powered the company to condemn a 
right of way for a pipe line : Carothers 
v. Philadelphia Co. (1888), 118 Pa. 

Incorporation under General Laws. 

The General Corporation Act of 
Pennsylvania (April 29, 1874, P. L. 73), 
provides for incorporation for (|2, 
clause 2, page 74), "XI. The manu- 
facture and supply of gas, or the supply 
of light or heat to the public by any other 
means." Their powers were defined 
to be ($34, p. 93), — " Clause I. Where 
any such company shall be incorporated 
as a gas company, or company for the 
supply of heat or light to the public, it 
shall have authority to supply with gas 



light, the borough, town, city or dis- 
trict where it may be located, and such 
persons, partnerships and corporations 
residing therein, or adjacent thereto, as 
may desire the same, at such price as 
may be agreed upon, and also to make, 
erect and maintain therein the neces- 
sary buildings, machinery and apparatus 
for manufacturing gas, heat or light 
from coal, or other material, and dis- 
tributing the same, with the right to 
enter upon any public street, lane, alley, 
or highway, for the purpose of laying 
down pipes, altering, inspecting, and 
repairing the same, doing as little dam- 
age to said streets, lanes, alleys and 
highways, and impairing the free use 
thereof as little as possible, and subject 
to such regulations as the councils of 
said borough, town, city or district may 
adopt in regard to grades, or for the 
protection and convenience of public 
travel over the same." 

In denying the right of a natural gas 
company to become incorporated under 
this statute, Green, J., Emerson v. 
Comm. (1884), 108 Pa. Ill, 125, 126, 
said — "It seems to us plain that the 
words of this section contemplate, and 
authorize, the creation of corporations for 
the manufacture and supply of gas, and 
the supply of light or heat, by any other 
means. Of course the only kind of 
gas companies that are authorized, are 
those which manufacture gas, and this 
necessarily excludes corporations for 
supplying natural gas, that being a pro- 
duct of nature, and not the result of 
any manufacturing process. The other 
companies authorized, are those for sup- 
plying light or heat, produced by any 
other means. * * * The furnish- 
ing of natural gas is not the furnishing 
of heat. Natural gas is not heat. It is 
a fuel, a substance which may be con- 
verted into heat by combustion with 
atmospheric air. When gas is delivered 
to the consumer, it is still gas only. It 
is not heat." In denying a re-argu- 

ment, the said Justice said — " Counsel 
are in error, in supposing that we de- 
cided that the Act of 1874 did not au- 
thorize the incorporation of companies 
for furnishing heat from natural gas. 
We carefully distinguished between 
charters for furnishing heat and those 
for furnishing natural gas itself; and 
we expressly declined to declare the re- 
spondent's charter void because it was 
a charter to furnish heat : " p. 127. 

Use of Public Street, or Country High- 

(See page 115, infra.) 
The laying of natural gas pipes in a 
public highway is an additional burden 
upon the easement; and cannot be 
done without the payment of damages 
for the privilege. 

A court of equity will restrain the 
laying of such pipe until the damages 
are assessed and paid : Sterling's Ap- 
peal (1885), III Pa. 35; In re Bloo?n- 
field and Rochester Natural Gas Light 
Co. (1875), 62 N. Y. 386; s. c. below, 
Bloomfield and Rochester Natural Gas 
Light Co. v. Richardson (1872), 63 
Barb. (N. Y.) 437. This rule has been 
applied by the Common Pleas of Ma- 
honing County, Ohio, even to a street in 
a city : Webb v. Ohio Gas Fuel Co. 
(1886) 16 Weekly L. Bull. 121, follow- 
ing The Lawrence R. R. Co. v. Wil- 
liams (1878), 85 Ohio St. 168. 

Use of a Railroad's Right of Way. 

When a railroad company does not 
take the land condemned, in fee, the 
original owner may lawfully enter upon 
the road-bed and lay an oil or gas pipe 
line under the railroad track : Hassan 
v. Oil Creek and Allegheny River R. 
R. Co. (1871), 8Pbila. 556. 

" The plaintiff insists that the agree- 
ment amounts to a sale of the oil [in 
the ground] itself, and that the oil, be- 
ing a part of the land, in a corporeal 
hereditament, to recover possession of 



which ejectment will lie. But if it be 
conceded that by the contract, there 
was a grant of the oil, it by no means 
follows from that alone that ejectment 
is maintainable. Oil is a fluid like 
water ; it is not the subject of property, 
except while in actual occupancy. A 
grant of water has long been con- 
sidered not to be a grant of anything 
for which an ejectment will lie. It is 
not a grant of the soil upon which the 
water rests : " Dark v. Johnson (1867), 
55 Pa. 164. 

But where the lease of land was for 
" the sole and exclusive right to bore or 
dig for oil * * and gather and col- 
lect the same * * for the term of 
twenty years," and for " the sole and 
and exclusive right to mine for coal, 
iron-ore and all other minerals, which 
may be obtained on said lands," the 
lease vested in the lessee a corporeal in- 
terest for which ejectment would lie : 
Barker v. Dale (1870), 3 Pitts. (Pa.) 
190 [and a receiver will not be ap- 
pointed, unless under urgent and pe- 
culiar circumstances] : Chicago, etc., 
Oil and Mining Co. v. U. S. Petroleum 
Co. (1868), 57 Pa. 83. 

A. granted to B. the exclusive right 
of boring for oil on a certain farm, re- 
serving the right to farm the surface ; if 
the boring proved profitable, the con- 
tract was to be construed as a perpetual 
lease; if otherwise, possession was to 
revert to A. On a part of the farm the 
boring proved profitable. A. brought 
suit, alleging that the boring had not 
been profitable on another part of the 
farm, and asked judgment for posses- 
sion of that part. The Court held that 
ejectment would not lie to test A's 
right to bore for oil ; but it would lie> 
under the agreement, if B. had occu- 
pied the land for other purposes, or to 
an extent greater than allowed by the 
contract, or if the license was revocable, 
or had been forfeited by B. The license, 
when made effectual by a successful re- 

sult according to the terms of the 
agreement, is perpetual and irrevoc- 
able : Rynd v. Rynd Farm Oil Co. 
(1870), 63 Pa. 397. 

An agreement was to lease " the ex- 
clusive right and privilege of boring for 
salt, oil or minerals upon his farm * * 
upon which the first party now resides, 
* * with the right of access to and 
from such places as may be selected by 
the party of the second part ; * * * 
said boring to be done so as to do the 
least possible injury to the farm," for a 
consideration of $150, and one third of 
the product. Holes were to be sunk to 
satisfy the parties as to practicability and 
profit for oil. This created an incor- 
poreal hereditament, and the only pos- 
session of the grantee was such as was 
necessary for the enjoyment of the 
right; the remedy for disturbance of 
the right was case, and not ejectment : 
Union Petroleum Co. v. Oliver Petro- 
leum Co. (1872), 72 Pa. 173. 

[In Phillips v. Coast, decided by the 
Supreme Court of Pa., January 6, 1890 
(25 W. N. C. 275), defendants had bona 
fide, and, by mistake, sunk a well on 
plaintiffs' land, for the purpose of boring 
for, and extracting oil. Plaintiffs brought 
an action of ejectment, and a receiver 
was appointed to keep an account of 
the product of the well during the con- 
tinuance of the suit. The Court held 
that the defendants were entitled to 
compensation, for their expenses in sink- 
ing such well, out of the proceeds of 
the oil produced. Green, J., " This 
is a kind of improvement of an un- 
usual character, and one which par- 
ticularly commended itself to the fav- 
orable opinion of the Courts. It was 
an oil well with all the machinery and 
appliances necessary to its operation. 
Now without this well and machinery 
the oil could not possibly be obtained. 
After it was completed, its operations 
were all for the benefit of the plaintiffs. 
* * * Obtaining oil from the bowels of 



the earth is a very different thing from 
obtaining crops from the surface of the 
ground. The oil only exists at a dis- 
tance of hundreds of feet below the 
surface. If it is not developed by means 
of wells, it is the same as if it had no 
existence at all. It is in a state of na- 
ture, of no use or value whatever to the 
owner of the land. * * * Therefore it 
is no hardship whatever to them, to re- 
pay to the defendants the bare cost of 
the well and appliances which belong 
to the plaintiffs now, and the whole 
benefits of which accrue to them alone. 
* * * The proposition that oil is part 
of the land, and cannot be regarded as 
mesne profits, and hence the right to 
compensation for valuable improve- 
ments, has no application. The oil has 
been taken. It is not a question of 
staying waste, but of allowance for the 
cost of valuable improvements actually 
necessary and made in good faith. For 
such improvements, compensation is al- 
lowed, whether that which is taken be 
mineral oil or other substance of the 
land or not :" Kille v. Ege (1876), 82 
Pa. 102 and Ege v. Kille (1877), 84 
Pa. 333, followed. 

Liability for Negligence. 

A natural gas company is not liable 
for injuries resulting from the negligence 
of an independent contractor, occurring 
before acceptance of his work ; unless 
work is accepted which the company 
knew, or ought to have known, had 
been performed in an unsafe and dan- 
gerous manner : Chartiers Valley Gas 
Co. v. Waters (1888), 1 23 Pa. 220; 
Same v. Lynch (1888), 118 Id. 362. 
The tenth section of the Act of 1885 
{supra, p. 102) was held, in these cases, 
to impose no duty, " no express or def- 
inite obligation " as regards what work 
should be done, or how : per Hand, J., 
123 Pa. 230. 

One taking gas from a natural gas 
company assumes only the usual and 

ordinary risks of such use, but not extra- 
ordinary risks caused by the negligence 
of the company : Oil City Fuel Supply 
Co. v. Boundy (1888), 122 Pa. 449. 

A gas company may not lay its pipe 
on the bottom of a navigable river, with- 
out incurring the risk of liability for 
accidents caused thereby; as where a 
boat ran on to such a pipe by accident, 
broke it, and the escaping gas caught 
fire from the boat's furnace and burned 
it up : Ormslaer v. Philadelphia Co. 
(1887), U. S. Dist. Ct., W. Dist. Pa., 31 
Fed. Repr. 354. 

Regulation by a Municipality. 

[Under Sections Eleven and Thirteen 
of the Act of 1885 (supra, pp. 103, 104), 
City " Councils are authorized to give, 
or withhold their assent, without more. 
They have no right to couple their 
assent with any condition, or restriction, 
not imposed by the Act, unless the 
company agrees to accept the same, and 
be bound thereby; and even then the 
conditions, or restrictions, so accepted 
by the company, must harmonize and 
in nowise conflict with the provisions of 
the Act. * * * In view of the limited 
authority delegated to Councils, it is a 
grave mistake to assume, as they appear 
to have done in this case, that they have 
power to legislate on any and everything 
connected directly, or indirectly, with 
the general subject :" Sterrett, J., 
Appeal of City of Pittsburgh ( 1 886) ,115 
Pa. 4. 

[The Councils of the City of Pitts- 
burgh, under this authority, passed two 
ordinances, of August IO, 1885, and 
December 29, 1885, and the following 
sections were declared void, in the case 
cited above : 

1. That the City Engineer should 
control the work of laying pipes, to the 
exclusion of the company. 

2. That the pipes should be tested; 
because indefinite as to how, when, or 
by whom the test was to be made. 



3. That a formal acceptance be made 
by the company of the ordinance, espe- 
cially as to those provisions illegal and 

4. That the company should submit 
to the city " plans, methods, specifica- 
tions, and estimates " for the acceptance 
or refusal of the Commissioner of High- 
ways, with appeal to the Councils, whose 
action was to be final, when the statute 
provided for an appeal to the court. 
Also a provision requiring such plans, 
on any extension of the pipes. 

5. That a showing be made, under 
oath, of the names of the stockholders, 
the amount of stock held by each, and 
that at least fifty per cent, had been paid 
up, of each subscription, in cash, or, if 
such is not the case, in what paid ; and 
that no permit be issued unless such 
Commissioner of Highways is satisfied 
that there is enough paid up capital to 
complete the work in accordance with 
the plans submitted. 

6. That a transfer of the privileges of 
the company to any other corporation 
be forbidden, under a penalty of a for- 
feiture of its privileges and all its prop- 
erty, without the assent in majority in 
value of its stockholders, and the ap- 
proval of the Council. 

7. That the company furnish, upon 
request of either branch of the Council's 
street committee, or by the Mayor, City 
Attorney and City Controller, or any two 
of them, with the City Controller, a 
sworn statement of its stockholders, that 
they hold stock in good faith for them- 
selves and not for others, or, if held by 
trustees, the names of the persons for 
whom held, requiring the company to 
demand this information upon receiving 
for registry a transfer of the stock. 

8. That the City be relieved from lia- 
bility in case of any neglect of the cor- 
poration, resulting in damages to person 
or property. 

9. That a consolidation be forbidden, 
in any way whatever, of the company 

with any other company, when a statute 
expressly authorized a consolidation 
upon certain terms. 

10. That the City Engineer, in case 
the company employ careless, incompe- 
tent or unskilful men, might discharge 
such men, and take charge of the work, 
and complete it, requiring the company 
to pay estimates in advance for two 
squares at a time, or the imposition of a 
forfeiture, in case of a neglect, or refusal, 
for fifteen days. 

11. That the company furnish a bond, 
conditioned for a faithful compliance 
with the provisions of the ordinance, 
and to indemnify the City against all 
loss, costs, suits, damages and expenses 
arising from the company's occupation 
and use of the streets. 

The following provisions were held 
valid : 

1. Fixing the depth to which the 
pipes should be laid, and allowing the 
City Engineer to designate what portion 
of the street should be occupied. 

2. Requiring the company, when ask- 
ing the permit, to submit to the Com- 
missioner of Highways a plan and full 
specifications, showing the streets pro- 
posed to be opened, the location, kind 
and size of pipes. 

3. Requiring the "system " to be ap- 
proved by the City Engineer and natural 
gas committee of Councils, of escape 
pipes sufficient to carry off any and all 
gas which may leak or escape ; gauges 
showing the pressure, open at all times 
to inspection, at points designated by 
the City Engineer; and that suitable 
means be used to protect pipes laid, 
where there are cinders or other injur- 
ious material. 

4. Requiring that no pipes be laid 
between November 15 and April 15. 

5. Authorizing the Commissioner of 
Highways to refuse, in his discretion, 
permission, if in his judgment the loca- 
tion proposed upon any highway, is 
injurious to the City ; to require altera- 



tions of the plans submitted ; to limit the 
number of pipes upon any highway to 
two trunk lines of competing companies. 

6. Requiring the company to pay the 
expense of repaying, or keeping in re- 
pair, for nine months, the streets opened 
for laying pipes, and that estimates for 
the cost thereof, for each section, not 
exceeding two squares, be furnished 
such Commissioner, and payment of the 
amount made to him, before permit is- 
sued for opening such squares : Appeal 
of City of Pittsburgh (1886), 115 Pa. 4. 

The Pennsylvania Act of 1885 (pro- 
viso to section 2, P. L., p. 31) forbids 
the granting, by any borough or city, to 
any natural gas company, the exclusive 
privilege to occupy the streets of such 
borough or city, and therefore a city 
cannot, under the guise of " regulations," 
confer an exclusive privilege on a com- 
pany for two years, requiring work to 
be begun at a fixed time, and gas to be 
introduced within fifteen months there- 
after : Meadville Fuel Gas Co. v. Mead- 
ville Natural Gas Co., decided in the 
Sup. Ct. Pa., May 31, 1886. 

Where a company had a rightful en- 
trance into a city, but the latter refused 
it the right to cross three streets, whereby 
great loss was sustained by the company 
in loss of gas, an injunction was granted 
to restrain the city's interference with 
crossing the streets, such a privilege 
having been granted to a rival company : 
People's Natural Gas Co. (1885), I Pa. 
C. C. 311. 

An injunction to restrain a natural gas 
company from using the streets of a 
town, because of alleged insufficient 
protection to the inhabitants in the use 
of pipes, was refused; thereupon the 
town passed an ordinance regulating the 
matter, and asked leave to file a sup- 
plemental bill, setting up this ordinance. 
The Court refused to allow the bill to 
be filed : Appeal of Borough of Butler, 
decided in the Sup. Ct. of Pa., Nov. 1 1, 

Unreasonable Rates. 

A natural gas company, having the 
power to exercise the right of eminent 
domain, and to occupy the streets of a 
city or town, must serve all alike, and 
furnish gas at reasonable rates. This is 
especially so under a statute declaring 
that the transportation and supply of 
such gas is of public benefit, and pre- 
venting the granting, by a town or city, 
to any company, the exclusive privilege 
to occupy the streets and supply gas. 
Where a company, in a State where 
such a statute was in force, after furnish- 
ing gas at a reasonable price, with as- 
surance of continuance, secured a mo- 
nopoly by terms made with competing 
companies, demanded excessive rates 
and threatened to shut off the gas unless 
the increased rates were paid , a prelim- 
inary restraining order was granted upon 
bill and affidavit, until the question could 
be more thoroughly investigated : Wad- 
dington v. Allegheny Heating Co. (1888), 
6 Pa. C. C. 96 ; Sewickley Borough v. 
Ohio Valley Gas Co. (1888), 6 Id. 99. 
See Appeal of Scranton Electric Light 
and Heat Co. (1888), 122 Pa. 154. 

[See Gas and Water Companies, 27 
Amer. Law Reg. 277. 
Oil is a Mineral. 

The Act of Pennsylvania (April 25, 
1850, P. L. 573) relating to accounts 
between tenants in common of coal or 
iron ore mines or minerals, includes oil 
or petroleum, under the general term of 
" other minerals"; and the fact that oil 
was not known when the Act was 
passed (1850), does not alter the case : 
Thompson v. Noble (1870), 3 Pitts. 
(Pa.) 201. A "mineral, and being a 
mineral, is part of the realty :" Slough- 
ton's Appeal (1879), 88 Pa. 198. But 
a reservation of "all minerals," in a 
deed,does not include petroleum : Dun- 
ham v. Kirkpatrick (1882), 101 Pa. 36. 
Ownership of Oil. 

Severance of oil from the freehold 
does not divest the owner of the title, 



nor his right to the immediate posses- 
sion, nor his replevying it, nor recovering 
its value if he sees fit. Oil in a well 
sunk by the owner of land is his exclu- 
sive property, whether drawn from an 
underground current of oil, or found 
standing. The case is not analogous to 
the surface owner's right in running 
streams of water. Such oil taken out of 
the well by a wrong-doer, remains the 
property of the well-owner: Hail v. 
Reed (1854), 15 B. Mon. (Ky.) 479. 


"Oil" is not synonymous with " gas ": 
therefore a lease ol land to be occupied 
and worked for petroleum, rock or car- 
bon oil, and not for any other purpose 
whatsoever; conditioned that if no oil 
be found in paying quantities within 
four years, the lease to be null and void, 
is not satisfied by the finding of gas : 
Truby v. Palmer, decided in the Sup, 
Ct. of Pa., October 4, 1886. 

Oil land, described by metes and 
bounds, with a "protection" of eight 
rods on the north side and ten rods on 
the east side, was leased to E. It was 
claimed that the north and east lines of 
the protection were not to be extended 
respectively beyond the east line and 
north lines of the leased property; and 
consequently the tract in the northeast 
corner, eight by ten rods, could be leased 
by the owner to T. for the purposes of 
sinking an oil well. The Court held 
that it could not; that the tract of eight 
by ten rods was within the " protection ;" 
and having leased this tract, T., who 
sank a well, and thereby injured A.'s 
well on the leased premises, was liable 
to E. for damages, and would be en- 
joined in the same action : Allison &* 
Evans' Appeal (1875), 77 Pa. 221. 

B. leased to L. a tract of land, L. to 
have the sole right to bore for oil for 
twenty years, L. to commence opera- 
tions in sixty days and to continue with 
due diligence; if L. ceased operations 

twenty days at any one time, B. could 
resume possession. It was stipulated 
that L.'s failure to comply with any one 
of the conditions, should work a forfeit- 
ure, and B. might enter and dispose of 
the premises as if the lease had not been 
made. It was also stipulated that if L. 
did not commence work at the time 
specified, he should pay B. $30 a month 
until L. should commence. Held, that 
the covenant of forfeiture was modified, 
not abrogated, by the clause for pay- 
ment of rent ; and L., having failed to 
to commence work for four months and 
then paying rent, was not entitled, at 
the end of eleven months from the date 
of payment, to tender the rent due and 
insist upon a continuation of the lease : 
Brown v. Vandergrift (1875), 80 Pa. 

A grant of certain land, in consider- 
ation of money paid, for the privilege 
of going upon it to prospect and bore 
for oil, with the exclusive use of one 
acre around each well, and with free 
ingress and egress in common with the 
grantor, the latter to have one-third of 
all " that is taken out " and the right 
of tillage of the land not occupied in 
operating the wells, does not amount to 
a lease nor sale of the land or oil, no 
estate in soil or oil being granted. The 
right of the grantee is to experiment for 
oil, sever it from the soil and take it, on 
yielding one-third to the grantor. The 
right of the grantee is a mere license to 
work the land for oil, coupled with an 
interest, not revocable at the pleasure of 
the grantor or licensor: Funk v. Hal- 
deman (1867), 53 Pa. 229. 

A lease of land for oil required opera- 
tions to be commenced within sixty 
days from the date of lease, one well to 
be completed within three months after 
such operations are begun ; and, in case 
of a failure to complete one well within 
that time, the lessee was to pay the 
lessor for such delay #1000 per annum, 
within three months after the time of 



completing such well. It was also 
covenanted that a failure to complete 
one well, or make such payment within 
that time, " renders this lease null and 
void, and to remain without effect be- 
tween the parties thereto." The lessee 
did nothing towards drilling a well, 
nor did he make any payment within 
three months after a well should have 
been completed. It was held that a 
forfeiture of the lease did not happen 
until default was made, both in com- 
pleting the well and in paying for the 
delay, or failure to complete it. But 
the lessee having neither drilled the 
first well nor paid the price of delay, 
the lessor was entitled to recover at the 
stipulated rate, for the time the lessee 
held exclusive right to operate : Galey 
v. Kellerman (1889), 123 Pa. 491. 

An assignee of an oil-and-gas-lease 
is not liable to the lessor, upon a cove- 
nant of the lease to drill a well upon 
the demised premises, when the time 
for performance had elapsed before the 
assignee acquired title under the assign- 
ment : Washington Natural Gas Co. 
■v.Johnson (1889), 123 Pa. 576. 

B. leased A's farm for the purpose of 
exploring for oil, at a royalty of one- 
eighth of the production. He cove- 
nanted " To continue, with due dili- 
gence and without delay, to prosecute 
the business to success or abandonment ; 
and if successful, to prosecute the same 
without interruption, for the common 
benefit of the parties." He assigned 
an interest in the lease to C. and D., 
and they with B. assigned to E. Two 
wells were bored, both of which were 
producing wells. E. refused to bore 
any other wells. A. sued E. upon the 
covenant quoted. It was held that this 
covenant was not the personal covenant 
of B., but a covenant running with the 
land, and binding on E. : and that the 
measure of damages was the amount of 
the oil A. ought to have received above 
the actual receipt, and the value of it 

during the times when it should have 
been delivered to him ; deducting there- 
from the cost of producing, what ought 
to have been produced at the time, 
under the circumstances, and with the 
appliances then known ; and adding to 
this remainder the interest on it from 
the time when the oil ought to have 
been produced to the time of the trial : 
Bradford Oil Co. v. Blair (1886), 113 
Pa. 83. 

A lessee under an oil lease, may not 
conduct the natural gas away from the 
land and appropriate it to his own use : 
Kitchen v. Smith (1882), 101 Pa. 452; 
contra, Wood County Petroleum Co. v. 
W. Va. Transportation Co. (1886), 28 
W. Va. 210. 

A grant of land " for the purpose of 
prospecting, boring, digging, drilling, 
pumping and otherwise searching for 
and obtaining oil, salt and other min- 
erals thereon," reserving to the grantor 
one-fourth of all the oil produced, does 
not convey a fee, but only a right to 
work the land for oil, salt and other 
minerals; and the sub-grantees are 
bound by any conditions as to the con- 
trol of the majority, that they may im- 
pose : Thompson's Appeal (1882), 101 
Pa. 225. 

But a lessee who has the possession 
of the land under an oil lease, has more 
than a mere license, and can recoup or 
recover taxes from the lessee under the 
Pennsylvania Act of April 3, 1 804: 
Kitchens. Smith (1882), 101 Pa. 452. 

A lease was granted by the owner of 
land for the purpose of boring salt- wells 
and manufacturing salt, so long as the 
salt-well contemplated in the lease, 
should be carried on by the lessee or 
his assigns, under certain provisions for 
a forfeiture, for a rent of every twelfth 
barrel of salt manufactured. After a 
time, oil rose with the salt-water, which, 
though first allowed to run to waste, 
was collected and sold. The owner 
of the land claimed the oil, and brought 



trover for it. It was held that trover 
would not lie, although ihe oil was his, 
for he had not the right of possession 
at the time of conversion by the lessee, 
either of the oil itself or of the land 
from which it flowed ; but the proper 
remedy was a bill in equity for an 
account, the measure of damage being 
the value of the oil at the instant of 
separation from the freehold. It was 
shown that the lessee could not raise 
the salt-water without raising the oil 
with it: Kier v. Peterson (1862), 41 
Pa- 357- 

A reservation, " expressly reserving 
one-eighth of the oil produced from the 
land, to be divided between " the lessor 
and lessee " on the land," means one- 
eighth of the oil raised to the surface 
by the grantee, and that the grantor is 
entitled to his share without deduction 
for the expense in producing it : Union 
Oil Company's Appeal (1883), 3 Penny. 
(Pa.) 504. 

An agreement to lease land for a 
term of years, with the exclusive right 
to bore for and collect oil, giving one- 
fourth to the lessor, passes a corporeal 
interest ; and the lessee's taking of his 
share of the oil found is not waste, but 
a rightful act, unless the lease be for- 
feited by its own terms : Chicago, etc., 
Oil and Mining Co. v. U. S. Petroleum 
Co. (1868) 57 Pa. 83. 

An agreement was made, giving a 
license to mine on land for oil, and a 
lease for ten years in case of a success- 
ful discovery. The lessor lost all rights 
thereunder by lapse of time, not hav- 
ing discovered oil within the time lim- 
ited by the contract. The lessor then 
agreed to refrain from declaring a for- 
feiture, if the lessee would carry on the 
search for petroleum constantly and with- 
out cessation. It was held that the 
latter agreement was conditional ; that 
its condition was suspension ; and that 
when the lessee ceased to carry on 

search for oil, the lessor was entitled to 
declare the forfeiture of the contract by 
suit, and claim possession of the lands 
without a formal putting in default. 
The Court declined to decide whether 
sulphur was a " similar product," under 
a contract based particularly upon the 
expectation of finding petroleum : Es- 
coubos v. Louisiana Petroleum and 
Coal Oil Co. (1870), 22 La. An. 280. 

A lease, purporting to be a grant or 
license to take oil, drawn by an igno- 
rant scrivener, at a time when the 
nature or value of the mineral was not 
known, should be construed with refer- 
ence to the subject-matter, and the 
knowledge of such subject-matter at 
the time; and as to its inartificial use 
of technical language, the whole scope 
of the paper is to be considered : French 
v. Brewer (1861), U. S. Circ. Ct., W. 
Dist., Pa., 3 Wall. Jr. 346. 

A lease, dated May 19, 1881, gave 
" the right to take, bore and mine for 
and gather all oil or gases found in 
and upon the premises, to have and to 
hold the same for the term of twelve 
years from this date, or as long as oil is 
found in paying quantities," the lessor 
to receive one- eighth of the oil produ ced 
and saved from the premises. The 
lessee covenanted " to commence ope- 
rations for said mining purposes, and 
prosecute the same on some portion of 
the above described premises within 
two years from this date, or thereafter 
pay to the lessor [blank] dollars per 
[blank] until work is commenced. 
This lease shall be null and void, and 
at an end, unless the lessee shall, within 
six months from this date, commence 
and prosecute, with due diligence, un- 
avoidable accidents excepted, the sink- 
ing and boring of one well on or in the 
vicinity of this lease, to a depth of 1 200 
feet, unless oil in paying quantities is 
sooner found. * * * If the lessee fail 
to keep and perform the covenants and 



agreements by him to be kept and per- 
formed, then this lease shall be null and 
void, and surrendered to the lessor." 

Within six months from the date of 
the lease, the lessee drilled a well 1 200 
feet deep finding natural gas at a depth 
of 1045 feet in large quantities, and 
some oil, but not in paying quantities, 
at 1093 feet. The lessee used the gas 
for fuel in drilling the well, but not in 
any other manner. In the fall of 1882, 
the lessee removed his engine, etc., leav- 
ing the casing in the well, and ceased 
to carry on mining operations. In 
February, 1884, the lessor released the 
premises to T., who assigned such lease 
to the defendant company, for the same 
purpose, pursuant to which they en- 
tered into possession of the same and 
collected and sold the gas. 

The lessee in the first lease brought 
an action to restrain the lessee, and his 
assignee, in the second lease, and their 
common lessor from interfering with, or 
appropriating to their own use, the gas 
therein. It was held that there was no 
covenant in the lease which required 
the first lessee to continue the boring of 
oil wells upon the premises until oil was 
obtained in paying quantities, under a 
penalty of forfeiting his rights by a fail- 
ure so to do ; that the covenant requiring 
him to commence and prosecute opera- 
tions for mining purposes within two 
years from the date of the lease, or 
thereafter pay to the lessor [blank] dol- 
lars per [blank] until work was com- 
menced, was void for uncertainty, by 
reason of the blanks which were left in 
the vital and essential parts thereof; 
that if a clause, that the lessor was to 
have one-eighth of the gas, had been 
omitted by mistake, the contract could 
be re-formed and the clause inserted, so 
as to express the intention of the parties ; 
that if it now expressed their intention, 
they must abide by it ; that the claim 
(that the first lease had expired by rea- 
son of its own terms, as the provision 
Vol. XXXVIII.— 7 

that the lessee should " have and hold 
the same for the term of twelve years 
from this date, or so long as oil is found 
in paying quantities," limited the terms 
to that period, during which oil was 
found in paying quantities) was not well 
founded, and that the term fixed was 
for twelve years, and as much longer as 
oil was found in paying quantities: 
Eaton v. Wilcox (1886), 42 Hun (N. Y.) 

A. leased land to B., with an oil well 
partly bored thereon. B. agreed to sink 
this well deeper, and to pay A. a roy- 
alty of one-fourth of all oil obtained 
from it. Both parties supposed the well 
was situated on the leased premises; 
but it was afterwards discovered that 
such was not the case. Then B. offered 
to deliver possession of the premises 
leased, and refused to pay the royalty. 
It was held that a court of equity, on a 
bill to account, would not order an ac- 
count; the action should have been 
brought at law. B. was not in a posi- 
tion to deny A.'s right to the royalty, 
and if an accounting was allowed, it 
would not be a bar to an action at law 
for the royalty : Mays v. Dwight ( 1 876), 
82 Pa. 462. 

B. leased of A. certain oil lands. No 
rent was reserved, and no term of the 
demise stated. B. agreed in the lease, 
to put down a well to a depth of 600 
feet, by a certain date ; upon a failure 
to do so, a right of entry was reserved to 
the lessor. B. did not sink the well. 
The lessor sued to recover for the breach. 
It was held that if B. had dug the well, 
it would have been his as well as the 
product thereof; and that the lessor 
could only recover nominal damages 
for the breach, and not what it would 
cost to sink such a well. The lease 
was construed to be a perpetual one to 
B., if he sank the well and kept the 
covenants of the demise : Chamberlain 
v. Parker (1871), 45 N. Y. 569. 

A mining lease, for a term certain, 



saving only to the lessor the right of til- 
lage, is exclusive, and the lessor cannot 
mine himself within the tenement : 
Baker v. Dale (1870), 3 Pitts. (Pa.) 

Land was leased exclusively for the 
purpose of producing oil, boring to be 
commenced within ten days, and con- 
tinued with due diligence until success 
or abandonment ; and a failure to get 
oil in paying quantities, or a cessure of 
work for thirty days at any time, 
amounted to a forfeiture of the lease. 
It was held that if the lessee failed to 
get oil in one well, he had a right to 
put down another, and as many more as 
he pleased, so long as he worked with 
diligence to success or abandonment; 
and that a cessation of work for thirty 
days forfeited the lease : Munroe v. 
Armstrong (1880), 96 Pa. 307. 

In October, 1875, B. agreed with S. 
that the latter should, for a term of fif- 
teen years, have the right to enter upon 
and use the lands of the former so far 
as might be necessary to enable him to 
bore for oil, reserving to B. the one- 
eighth of all oil produced. Unless S. 
should commence boring the said well 
within nine months from the date of the 
contract, it was " to become void and 
cease to be of any binding effect." This 
contract was recorded and assigned to 
the defendant, who entered upon the 
land and at once commenced to bore a 
well, in February, 1877. In Septem- 
ber, 1876, B., who had remained in 
possession of the land and in no way 
waived, extended or qualified the fulfill- 
ment of the contract, executed another 
and similar lease to M. and others, con- 
ferring upon them the exclusive right to 
dig and bore for oil on the farm for the 
term of twelve years, which lease was 
recorded in January, 1877. [The re- 
ported decision says " 1876," but this is 
evidently a clerical error.] M. and his 
co-lessees assigned their lease to the 
plaintiff, who, within the time therein 

specified, entered upon the land and 
commenced to bore a well. The plain- 
tiff sued the defendant, his assignees 
and B., to procure a judgment declaring 
the S. lease forfeited and annulled, and 
to restrain the defendants from entering 
upon the land or boring therein for oil. 
The Court held that even though the 
lease appeared upon its surface to have 
become void by reason of the failure of 
the lessee to commence operations within 
the time limited by it, and though the 
act of the defendant in thereafter enter- 
ing upon the land was a mere trespass, 
yet as the controversy related to the 
sinking of oil wells in land, in violation 
of rights therein claimed by the plaintiff, 
a court of equity would grant relief by 
injunction ; that as B. continued at all 
times to occupy the land, it was not 
necessary that he should re-enter or 
give any notice of his intention to en- 
force the forfeiture occasioned by the 
neglect of the lessees to commence op- 
erations within the time limited; that 
even if any overt act or notice was re- 
quired, the execution and delivery of the 
new lease to M. was a sufficient declar- 
ation of his election to enforce the for- 
feiture ; and that the defendant could 
not show that after the execution and 
delivery of the lease to M., B. consented 
to his entering upon the land : Alle- 
gheny Oil Co. v. Bradford Oil Co. 
(1880), 21 Hun (N. Y.) 26; affirmed 
(1881), 86N.Y. 638. 

A court will not decide, unaided by 
expert evidence, that natural gas is in- 
cluded in a lease of the right to mine 
" for petroleum, rock or carbon oil, or 
other valuable volatile substances : ' 
Ford v. Buchanan (1886), III Pa. 31 

The assignment of a leaseholdinterest, 
including engines, boilers, tanks, tubing, 
derricks, and all other fixtures and per- 
sonal property situated upon and apper 
taining thereto, does not transfer oil in 
tanks at the well : Dresser v. Trans- 
portation Co. (1875), 8 W. Va. 553. 



A. leased to B. 228 acres for the sole 
and only purpose of mining and exca- 
vating for gas and oil, for twenty years, 
or as long as oil or gas should be found 
on the premises in paying quantities 
within that period. The lessee agreed 
to commence operations upon one well 
within ninety days, and to prosecute the 
work " actively, diligently and continu- 
ously," and to complete the same on or 
before a day named, " and upon failure 
to do so within the time herein pre- 
scribed, to pay the party of the first part 
the sum of $1000 annually, in advance," 
etc. It was declared that upon a failure 
by the lessee to keep the covenants of 
the lease, that " such failure to perform, 
or breach of the said covenant, shall 
work an absolute forfeiture of this grant 
or lease, and the privileges or easements 
hereby given shall absolutely cease, de- 
termine, and become null and void." 
The Court held that the lessee could 
not terminate the lease by breach of the 
covenants, and the lessor might or might 
not terminate it, on such breach, at his 
pleasure : Wills v. Manufacturers' Nat- 
ural Gas Co., decided in the Supreme 
Ct. of Pa., Nov. 11, 1889. 

Measure of Damage on a Contract to 
Dig an Oil or Gas Well. 

A. contracted to sink an oil well 
within twelve months, or pay $25 per 
annum until work commenced. In an 
action for this sum, it was held to be a 
good defense, except as to nominal 
damages, that the contract was founded 
on a mutual mistake as to the existence 
of oil on the lands : Bellv. Truit (1872), 
9 Bush (Ky.) 257. 

If the contract is to dig a well a cer- 
tain depth and of a certain width, dig- 
ging one of the required depth, but of a 
narrower width, is not a compliance with 
the contract ; and there can be no re- 
covery, even if no gas is found, although 
the one dug was as effectual in deter- 
mining whether gas could there be found 

as the wider one : Gillespie Tool Co. v. 
Wilson (1888), 123 Pa. 19. 

Grant of Exclusive Use of Streets. 

[Beyond compensation for the ad- 
ditional burden upon the land used as a 
street (supra, page 105), the greater 
question arises of the power to secure 
the exclusive right to lay pipes. 

As a result of many authorities upon 
this subject, it may be stated that a 
town or city, without power expressly 
conferred upon it by statute, cannot 
grant to a natural or artificial gas com- 
pany, or one incorporated to furnish 
water, the right to an exclusive use of 
its streets, for the purpose of laying 
pipes therein, and supplying the inhab- 
itants with gas or water ; and if it does 
do so, it may, without danger of liabili- 
ty, disregard the grant and give other 
and similar companies, such privileges. 
If the town or city is empowered to 
grant such exclusive use by statute, or 
the legislature grant such an exclusive 
privilege; and the privilege or use is 
accepted by the company, and expendi- 
tures are made in pursuance thereof, 
the grant becomes a contract, which 
cannot be revoked, either by the city or 
the legislature. 

[These statements are sustained and 
illustrated by the following cases : 

Municipal Grant. 

[Such grants are void, because the 
general rule of law denies to municipal 
corporations, the power to create mo- 
nopolies : Elliott, J., Citizens G. &* 
M. Co.v. Town of £ huood (1887), 114 
Ind. 332, 336. ///. cV St. L. R. R. cV C. 
Co. v. City of St. Louis (1872), U. S. 
Circ. Ct., E. Dist. Mo., 2 Dill. 70 (grain 
elevated) ; Davenport v. Kleinschmidt 
(1887), 6 Mont. 502, 529 (water sup- 


[" The exercise of such power may 
be convenient, but that is not sufficient; 
it must be essential and indispensable 



to the powers expressly granted, or to 
the declared objects and purposes of 
the corporation. * * * It is certainly not 
essential, or necessarily incident to the 
power, expressly granted, * to lay off 
streets,' etc., 'and light the same,' that 
the city should delegate to a private 
individual, or corporation, the exclusive 
right to furnish such light, and use the 
streets for that purpose. To justify such 
a construction, it must appear that in no 
other proper, or reasonable manner, 
could the city provide light for its streets 
and inhabitants :" Snyder, J., Park- 
ersburg Gas Co. v. City of Parkersburg 
(1887), 30 W. Va. 43s, 440. 

[Where municipalities are authorized 
to grant the privilege of using the 
streets, no arbitrary authority is thereby 
conferred, but their action must be by 
an ordinance which is general in its 
nature and impartial in its operation, 
and which does not grant a special privi- 
lege to any company : Elliott, J. 
Citizens G. c> M. Co. v. Town of El- 
««W(i887), 114 Ind. 332, 338. 

[In this case, a statute of Indiana 
(approved March 7, 1887, Laws, p. 36) 
provides — "Section i. Be it, etc., 
That the Boards of Trustees of towns, 
and the Common Councils of cities in 
this State, shall have power to provide 
by ordinance, reasonable regulations for 
the safe supply, distribution and con- 
sumption of natural gas, within the re- 
spective limits of such towns and cities, 
and to require persons or companies, to 
whom the privilege of using the streets 
and alleys of such towns and cities is 
granted, for the supply and distribution 
of such gas, to pay a reasonable license 
for such franchise and privilege." 

Municipal Revocation. 

[If an exclusive grant is made, the 
municipality may subsequently make 
another grant to another company, with 
impunity; the first grant being a con- 
tract beyond the power of the munici- 

pality : Grand Rapids E. L. ijr> P. Co. 
v. Grand Rapids E. E. L. cV F. G. 
Co. (1888), U. S. Circ. Ct., W. Dist. 
Mich., 33 Fed. Repr. 659, 667, 677. 

Municipal Contracts. 

[If the contract is not warranted by 
the city charter, the city councils have, 
at all times, the right to declare it void 
and to refuse compliance with it : 
Brenham v. Brenham Water Co. 
(1887), 67 Texas 542, 553. 

[Subject to legislative interference 
(see below), a contract with a coal gas 
company, properly entered into, will 
bind the municipality, upon informal 
renewal : Taylor s.Lambcrtville (1887), 
43 N. J. Eq. 107, before Bird, V. C. 
And may be modified by subsequent 
contracts : City of St. Louis v. St. Louis 
G.-L. Co. (1879), 70 Mo. 69; s. c, 5 
Mo. App. 484, 

[If a municipality refuses to take and 
pay for coal gas, it would probably be 
liable in damages : Adams, C. J., Searl 
v. Abraham (1887), 73 Iowa 507. 

[Where a city charter gave authority 
to the common council to provide, by 
ordinance, "for a supply of water for 
said city," and an ordinance was duly 
passed for a contract, and the contract 
contained a stipulation to pay an annual 
sum for fire purposes, the city was bound 
to pay for the water supply under the 
terms of the contract. It was no defense 
that the contract was to be continued as 
long as the company performed its part, 
because the authority to contract in this 
manner could not be denied to the city, 
under another section of its charter, re- 
quiring taxation for defraying the ex- 
pense of water supply to be annual: 
Atlantic City W. W. Co. v. Atlantic City 
(1886), 48 N. J. Law 378. 
Additional Light. 

[There is a strong current of authori- 
ties to the effect that an exclusive con- 
tract for lighting the streets by coal gas, 
is not infringed by granting permission 



to an electric light company to light the 
streets, stores and houses : the question 
is interesting as showing the limits upon 
exclusive grants by municipalities. Upon 
the abstract question of more light, these 
authorities are not necessarily conclu- 
sive : Parkersburg Gas Co. v. The City 
of Parkersburg (1887), 30 W. Va. 435, 
442; Saginaw G.-L. Co. v. The City of 
Saginaw (1886), U. S. Circ. Ct., E. D. 
Mich., 28 Fed. Repr. 529, 538. 

Legislative Revocation. 

[Where a municipality was autho- 
rized by statute, to contract with a coal 
gas company, for the lighting of the 
streets, and made a contract for five 
years, this contract could be terminated 
by the repeal of the statute within the 
five years : Richmond Co. Gaslight Co. 
v. Middletown (1874), 59 N. Y. 228, 
232. The same ruling was made in the 
case of a ten year contract which the 
municipality afterwards repudiated : 
Garrison v. City of Chicago (1877), 
U. S. Circ. Ct., N. Dist. 111., 7 Biss. 480 ; 
and a twenty-five year contract, on in- 
tervention of the State, by quo war- 
ranto : The State, ex rel. v. Cin. G. L. 
&> C. Co. (1868), 18 Ohio St. 262. 
Legislative Grant. 

[The legislature may confer upon a 
private corporation, the exclusive right 
to furnish coal gas to the citizens of a 
municipality; and in such cases, the 
legislative right to supervise and con- 
trol, remains, unless clearly given up in 
a constitutional manner: State v. Mil- 
waukee G. L. Co. (1872), 29 Wis. 454, 
460, 462 ; The State, ex rel. v. Colum- 
bus G. L. <&» C. Co. (1878), 34 Ohio 
St. 572; City of Memphis v. The 
Memphis Water Co. (1871), 5 Heisk. 
(Tenn.) 495, 530. 

[Such privilege is a franchise which 
can only emanate, directly or in- 
directly, from the sovereign power of 
the State: Scott, J. The Slate, ex 
rel. v. Cin. G. L. 6- C. Co. (1868), 

18 Ohio St. 262, 291 ; Hamilton G.-L. 
Co. v. The City of Hamilton (1889), U. 
S. Circ. Ct., S. Dist. Ohio, 37 Fed. 
Repr. 832, 837 ; Saginaw G.-L. Co. v. 
City of Saginaw (1886), U. S. Circ. Ct, 
E. Dist. Mich., 28 Fed. Repr. 529,535, 

[This right was denied, as creating a 
monopoly, in the early coal gas case of 
Norwich Gas Light Co. v. Norwich 
City Gas Co. (1856), 25 Conn. 19. 
But all doubt has since been removed 
by subjecting such contracts to the police 
power of the State, while upholding 
their sanctity, when otherwise valid: 
New Orleans Water Works Co. v. Rivers 
(1885), 115 U. S. 674; New Orleans 
Gas-Light Co. v. La. Light & Heal P. 
&>M. Co. (1885), Id. 650; Louisville 
Gas Co. v. Citizens' G.-L. Co. (1885), 
Id. 683 ; St. Tammany Water Works Co. 
et al. v. New Orleans Water Works Co. 
(1886), 1 20 U. S. 64; TheBinghamp- 
ton Bridge (1865), 3 Wall. (70 U. S.) 

Exclusive Right of Way. 

[In the case of the West Virginia 
Transp. Co. v. Ohio River Pipe Line 
Co. (1883), 22 W. Va. 600, the grant 
of an exclusive use of a tract of land, 
for a pipe and telegraph line, was held 
to be void, as contrary to public policy 
and imposing an unreasonable restraint 
upon trade, by preventing others from 
transporting oil from or through the land. 

Restricting the Transportation of Nat- 
ural Gas. 

Natural gas, when brought to the 
surface, and placed in pipes for trans- 
portation, is an article of commerce, 
and the legislature cannot enact a law 
forbidding its transportation beyond the 
limits of the State : Stale, ex rel. Corwin, 
v. Indiana &* Ohio O. G. <&• M. Co., 
decided by the Supreme Court of In- 
diana, November 6, 1889. 

W. W. Thornton. 

Indianapolis, Ind,